Guardian iPhone

You can go for free, or you can go for paid when it comes to pricing your mobile apps. Or if you’re Guardian News & Media, publisher of Guardian.co.uk, The Guardian and The Observer newspapers, you do both.

GNM launched its Android app this week, available to download for the low, low price of absolutely nothing. A short-term sponsorship deal from Samsung lightens the burden of in-house development costs, just as the Guardian’s impressive Eyewitness iPad app has long-term sponsorship from Canon.

The free content-loving Guardian was keen to point out when it launched the first version of its paid-for iPhone app in 2009 that it had no prit’s noblem charging for access to content on devices, just as it charges £1 a day for the printed newspaper. The recently launched Kindle edition is £9.99 a month, so this is slight departure.

Plus, apps make money and Guardian – about to enter yet another round of voluntary redundancies – could do with some:

– Since the latest version of the iPhone app launched in January, it’s now clocked up 509,264 free downloads and and 86,000 subscriptions at either £3.99 a year or £2.99 for six months.

– The last time we heard, 72 percent of subscribers went for the 12-month option, so at that ratio The Guardian made £319,000 from mobile payments since January, before Apple’s 30 percent is lopped off the top. (Curiously, Guardian blames Apple for the 12-month price rising to £4.99 in July.)

But Steve Wing, the Guardian’s head of digital marketing, told me today that free is just one route to market and the Android launch doesn’t mean the business is turning its back on paid-for digital products entirely:

“If you look at the broad strategy principles, the mobile site is a free product, has great stats and a way to give everyone a great experience – but with applications we are looking at them slightly differently. As part of that thinking we are looking at what will create a sustainable business model,” he said.

Wing highlights the success of the m-site, which now accounts for 12 percent of all visits to Guardian.co.uk. That will remain free for the long-term forseeable future, just like the main site, monetised by ads and sponsorship.

“We have experimented with a number of different models – you can’t just always assume that charging is always the best one. With the Android app, we want as many people to see it as possible. We are persuing a mixed model and we will adapt that depending on the audience.”

So will there be charging in future? “Never say never. This is all part of a broader piece of thinking about how we build reach.”

This is a pragmatic approach and it mirrors a thoughtful talk and essay from Guardian information architect Martin Belam last week, who argued that different platforms require different approaches: “Mobiles are not tablets. Tablets are not desktops. And neither of these things are print products,” he said.

It’s not all about selling apps

But this strategy can only go as fast as the audience will grow. Mobile ads are still in their infancy (in revenue terms, if not in actual years) and sponsorship deals may cover costs but they will struggle to grow mobile revenue over the coming years.

So how about in-app purchases, a closer integration of general GNM e-commerce and intelligent advertising initiatives? “All of the above” is being worked on, according to Wing. “We are at the beginning of this and everything is on the table. On tablet particularly the commerce platform is much more [important]. The freemium model of in-app subscriptions to download special editions is very interesting. It’s all about building a sustainable financial strategy.”

My take – free/paid model wise but with risks

Initially I was curious why a top publisher would de-value its entire digital output by giving it away from nothing when there’s a clear route to monetisation through charging. At times I want to say to the Guardian, “please let me pay you more for all this content I’m enjoying,” and I still think £5 for a year subscription to the iPhone app (about £0.01 a day) is too cheap. The forthcoming iPad app will have a more robust pricing structure, no doubt.

But it’s wise to be riding the crest of the Android wave that’s about to hit digital publishers; there is value in being considered the best newspaper app in the Android Market – the functionality and personalisation of the app may just achieve that. Be in no doubt that Android is going to be the platform your users will be on very soon, as our report on mobile publishing made clear earlier this year: “Our 2015 prediction is of a repeat of the smartphone environment:
Android dominant, with Apple owning a highly-profitable niche, and Microsoft playing a tenacious but unprofitable game of catch-up.” (That report is available here)

But the risk of free mobile publishing is a big one: will mobile readership and – more importantly – mobile ads accelerate fast enough to make this investment worthwhile? According to figures from IAB/PwC, mobile advertising grew by 166 percent to £83 million in 2010, up from £37.6 million in 2009. That’s good growth, but it’s from a low base and WARC predicts UK online ads overall will only rise 2.3 percent this year.

So it’s good strategy to be on Android right now – let’s hope the economy picks up.

Picture via TimDifford on Flickr, via a Creative Commons licence.